Apple should consider acquiring Sonos if it wants to lead in the home audio networking market, a small niche with big potential, according to an analyst.

William Blair analyst Ralph Schackart suggested Apple make the move in a research note.

Blair suggests:
- Apple should enter the home audio networking market to extend iTunes and provide subscription services;
- Sonos would round out Apple’s lineup;
- There’s a lot of headroom in the home audio networking market.

The home audio market is just 1.6% of the $170 billion-plus consumer electronics (CE) end-market. In our view, the market is underdeveloped and existing products are too focused on the audiophile and aficionado market to become mainstream, Blair wrote.

We believe Apple has the potential to transform this market the same way it transformed the portable mp3 player market, growing it from nascent niche to a new product category, he added.

Sonos is privately held and the company’s wireless networking gear distributes iTunes and other services like Pandora and Sirius XM throughout your home, according to Zdnet report.

If Apple bought Sonos, Schackart estimates that the market is worth an additional $2 a share in earnings to the company.

Electronics Steve jobs Apple inc. ITunes